Kenya Power records profit of Sh319m, a turnaround from previous loss

Kenya Power has announced a significant turnaround reporting a profit of Sh319 million after tax, for the half-year period ending December 2023.

In a statement, Kenya Power managing director Joseph Siror said the returns mark a notable improvement from the previous year, where the company had recorded a loss of Sh1.1 billion during the same period.

The positive results have been attributed to a robust growth in revenue, driven by increased electricity sales and the implementation of a cost-reflective tariff.

Siror said the revenue from electricity sales surged by 31 per cent, reaching Sh113.6 billion during the period under review.

"I am glad to note that our sales growth was driven by our deliberate effort to grow our customer numbers, having surpassed our connectivity target for the half-year period by 13.87 per cent with a total of 225,000 new customers to the grid," he said.

He added that the deployment of a Rapid Results Initiative (RRI), also contributed to the revenue growth.

RRI is aimed at accelerating meter installation for new connections across the country. According to the company, the strategy is also designed to enhance customer connectivity and drive electricity sales.

In addition, there was a notable increase in electricity units purchased and dispatched from renewable energy sources, resulting in a reduction of thermal generation consumption by 93GWh.

Siror said this led to a significant decrease in fuel cost charges on customer bills, amounting to Sh2.05 billion.

"Over the six months under review, there was a 240GWh increase in electricity units purchased and dispatched from renewable energy sources. Following increased uptake of energy from renewable sources, consumption of thermal generation reduced by 93GWh from 650GWh in the similar period in 2022 to 557GWh leading to a Sh2.05 billion reduction in fuel cost charge on customer bills," he said.

Despite the positive revenue growth and a significant reduction in fuel cost charges, Siror said the company's finance costs increased by Sh7.6 billion.

He said this was mainly due to unrealised foreign exchange losses on loan revaluations as a result of the depreciation of the Kenyan shilling against major foreign currencies.

The foreign currency-denominated loans account for 90 per cent of the Company's loan portfolio.

"We are happy to note that the shilling is gaining against the dollar and other major currencies in the current period. We hope that this positive trend continues in the remaining part of the year to ease our forex exposure and enable us to finish the year in a stronger financial position," he said.

Siror said operating costs also experienced an uptick during the period under review, reaching Sh19.7 billion from Sh1.7 billion.

The increase was attributed to higher electricity wheeling charges and increased depreciation, as well as additional staff costs to reinforce field operations and improve overall operational efficiency.

Kenya Power said it aims to sustain profitability by intensifying initiatives focused on bolstering sales, optimising revenue collection, and enhancing system efficiency.

"While we are keen to onboard new customers, our immediate focus is to enhance customer experience. Therefore, in the period ahead, we will step up our investments in the network to fortify its reliability. This aligns with our core mission of providing affordable, clean, reliable and sustainable power to Kenyan households and enterprises," Siror said.